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Practical Financial Advice For New Tutors

Tutoring is a great job for you if you love to teach in a non-traditional school setting. Tutoring also allows you to set your own teaching schedules while making out time for yourself. What’s more, it is a good way of earning a sizable income every month without putting in all the time that MOM teachers do. With your cool earnings and flexible tutoring schedule, you may feel that paying tax isn’t necessary. Spoiler alert: you need to pay tax. While most of your students may pay their tuition fees in cash, eventually you will need to declare your earnings.

Those are just one of the things that you have to consider when planning your finances as a new tutor. The earnings may be great, but there are a number of financial responsibilities that you need to carry out. Tax is one of them. Another one is budgeting and saving for emergencies and savings. Then you have your personal expenses, and there is still stationary and transportation to consider.

This may all seem overwhelming, but it shouldn’t be. With great planning, your finances will be in great shape and you will enjoy being a tutor with a good salary.

Be Mindful That You Need To Pay Taxes

Taxes are unavoidable. As long as you earn an income, you need to pay tax. In recent years, the IRAS busted a good number of persons for not paying their taxes. Surprisingly, that number had a lot of private tutors, as well as tutoring business owners in it. Your payment as a tutor isn’t structured like that of MOM teachers. Some of your clients even pay you in cash. This doesn’t matter to IRAS. As long as you earn, you have to declare your income. There is even a law regarding this, which states that all self-employed persons have to declare their earnings, not as salaries, but as business incomes. Which means you will also have to calculate and pay up those taxes.

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Calculating tax isn’t as complicated as it seems. You just need to know some certain terms, and then you will know how to calculate it. First, you need to find out what your Chargeable Income is. Chargeable income is the amount of income that can be taxed. This, in turn, means that it isn’t your total income that is taxable. To find your chargeable income, you will have to use this formula:

Total Income – Tax Reliefs = Chargeable Income

Where Total Income is how much you earn per year, and tax reliefs refer to the portion of the tax that is remitted, which is due on any income you earn. The higher your tax reliefs, the lower the amount of tax you pay.

Once you figure out your chargeable income, you will know what tax bracket you fall into and how much you are required to pay.

Make sure you have accounted for your earnings and your expenditure and report them duly, so as to stay in the clear with the IRAS.

Budget For Expenses Like Transportation And Stationeries

Owning a car in Singapore is a really expensive expense and unnecessary, so you have to use public transportation. While it is efficient and very effective, it won’t pay for itself. You need to get materials with which you can instruct your students. You need a never-ending supply of writing materials and paper for lesson plans and lesson notes and other instructional tools that you may need. You may also need to transport yourself to the local library, or pay for educational training and manuals online.

None of these things is going to pay for themselves: you are. So, if you really want to enjoy your tutoring income, you need to be a discipline budgeter. Don’t just budget for savings, but also for expenses. Groceries, toiletries, card payments, rent, and a host of other things you may think are minor and can be paid off the top of your head.

Budget for them all and keep track of how much you spend on all of these essentials. This will help you prepare better budgets for the cost of what you need, and you can even get a tax reduction if you can state them as your business expenditures.

Save For Emergency Needs

Savings and emergency funds are not the same things. Emergency funds are set up so as to deal with any unplanned-for financial situations. Make sure you set up an emergency account, as well as a savings account, and budget for them as often as you get your earnings.

Cancellations Happen

While tutoring jobs are great for your pocket and your work-life balance, they are unstable. Point in fact: your students can cancel tuition at any time, without warning. Cancelled tuition classes mean no income for you, and this is an emergency on its own.

To avoid taking by surprise make sure you establish a policy with your client that necessitates them informing you of their wishes to cancel at least a month or two weeks before they do. They should understand early on in this tutoring venture that this policy is to ensure zero misunderstandings between you and them. Knowing of the cancellation ahead of time will give you ample opportunity to seek out clients so that you won’t be left hanging.

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Set Aside Funds To Upgrade Yourself

Going in, you should know that tutoring is a competitive business. To remain of value to your customers, you need to constantly improve on yourself. Once you start earning an income, set aside some funds for upgrading your tutoring skills. These upgrades push you to become an educational professional, with more services to offer and keeps you in high demand.


It is important for tutors to keep their financial game straight. The money is good and the hours are flexible, but you may fall prey to some situations that will leave you with little money and a host of financial obligations to fulfil. To avoid getting charged with tax evasion, make sure you pay your taxes. Always save money for emergencies, and never fail to budget for your expenses. Do not neglect yourself in all this: keep some money to improve your skills as a tutor.

All of this will ensure that your books are straight and in the black, and you will not need to worry about your finances again.

These articles can help you, as a new tutor in your new career:

Simple Tips to Ensure the First Home Tuition Lesson Goes Smoothly
How Tutors Should Take Advantage Of Slow Tutoring Seasons

Rum Tan

Rum Tan is the founder of SmileTutor and he believes that every child deserves a smile. Motivated by this belief and passion, he works hard day & night with his team to maintain the most trustworthy source of home tutors in Singapore. In his free time, he writes articles hoping to educate, enlighten, and empower parents, students, and tutors. You may try out his free home tutoring services via or by calling 6266 4475 directly today.